Transform Small Donors into Major Donors

Your not-for-profit organization is making a profound difference in the lives of those served. You are busy, your staff is busy, your staff is busy, and it’s time to put the pedal to the floor and launch a Major Gifts campaign.

The organization has a strong fan base, and there are those who would like to really leave a legacy. But not everyone may be in a position to part with legacy-level dollars…

…while they are alive.

The answer: Life insurance.

Here’s how it works: A person can make a small or medium-sized donation to the charity of their choice. That charity uses those funds to purchase a life insurance policy on that donor, with the charity as the beneficiary. (The charity also creates a budget line item for the premiums in case the donations to cover the premium stop coming for whatever reason.) Upon the eventual passing of the donor, the benefit that the charity receives will be many times the sum donated over the years.

If it’s so straightforward, why aren’t I hearing about this all over the place? I hear you ask.

  • Certain institutions do this all the time, notably charities that promote medical research, United Way, and Jewish Federations. It’s also a common practice in estate planning. The word is spreading.
  • Life insurance is, plainly put, an underutilized way to help people leave a legacy.

A cautionary note: It is better for the not-for-profit to own the policy so that after years of paying premiums, the beneficiary doesn’t get changed by the policy owner. Make sure to run it past a lawyer because it has to be done in a certain way, to the benefit of everyone.

So help someone to hit the Good Deed button, they can make a difference in the lives of the people who will benefit from your organization!

We thank Steven Kobrin for his co-authoriship of this blog. Steve is a life insurance expert with over 25 years experience. He serves high net-worth individuals and business owners, as well as high risk and uninsurable “impaired cases.” Steven offers concierge life insurance process to ensure the policy is approved as it’s quoted. To learn more, visit his website, read his blog, connect with him on LinkedIn, or request a policy audit today by calling his office at (866) 633-1818 or by email at skobrin@stevenkobrin.com. Steven is a contributor to Investopedia; view his profile here.

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